"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
A rate "lock" or "commitment" is a lender's promise to hold a particular interest rate and a particular number of points for you for a specified period while your application is processed. This prevents you from going through your entire application process and learning at the end that your interest rate has gotten higher.
Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer period generally costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher rate than you would with a shorter span of time
More Ways to Get a Great Interest Rate
There are other ways to get a reduced rate, in addition to opting for a shorter rate lock period. A bigger down payment will result in a better interest rate, because you will be starting out with more equity. You may opt to pay points to lower your interest rate for the life of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to reduce the rate over the term of the loan. You'll pay more initially, but you will come out ahead in the long run.
Coleman Mortgage Company can walk you through the pitfalls of getting a mortgage. Give us a call: 972-932-9083.